Registered credit provider: Reg number NCRCP18 Policies/Supply Chain Managem… · Supply Chain...
Transcript of Registered credit provider: Reg number NCRCP18 Policies/Supply Chain Managem… · Supply Chain...
Confidential The Land and Agricultural Development Bank of South Africa
P O Box 375 Pretoria 0001 Block D Eco Glades 2 Office Park, 420 Witch Hazel Avenue Eco Park
CENTURION
Tel: +27 (0)12 686 0500
Fax: +27 (0)12 686 0682
Registered credit provider: Reg number NCRCP18 www.landbank.co.za
SUPPLY CHAIN MANAGEMENT
POLICY
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2020 Page 2 of 37
Table of Contents
1 Purpose .............................................................................................................................. 3
2 Objectives.......................................................................................................................... 3
3 Scope .................................................................................................................................. 3
4 Definitions......................................................................................................................... 8
5 Contextual Background .............................................................................................. 10
6 Policy................................................................................................................................. 12
7 Annual Procurement Plans ......................................................................................... 17
8 Availability Of Budget .................................................................................................. 17
9 Procurement Up To A Value Of R10 000 (Vat Incl.) ........................................... 18
10 Procurement Above R10 000 and R500 000 (Vat Incl.) .................................... 18
11 Procurement Above The Value Of R500 000 (Vat Incl.) .................................... 18
12 Panel Appointments ..................................................................................................... 19
13 Single Sourcing .............................................................................................................. 20
14 Bids .................................................................................................................................... 21
15 Bid Evaluation Committee .......................................................................................... 22
16 Scoring Of Bids .............................................................................................................. 23
17 Unsolicited Bids ............................................................................................................. 29
18 Supplier Database ......................................................................................................... 30
19 Supplier Restriction ...................................................................................................... 31
20 Procurement Committee ............................................................................................ 31
21 Tender Report ................................................................................................................ 33
22 Contracts ......................................................................................................................... 33
23 Subcontracting .............................................................................................................. 35
24 Conflict Of Interest ....................................................................................................... 36
25 Non Compliance ............................................................................................................ 32
26 Process ............................................................................................................................. 37
27 Approval .......................................................................................................................... 37
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 3 of 37
1 PURPOSE
1.1. The purpose of this policy is to:
1.1.1 Set guidelines for all Land Bank Group personnel engaged in Supply Chain
Management (SCM) processes to ensure compliance with governance
requirements;
1.1.2 Ensure the efficient, effective, economic and uniform procurement of goods
and services required for the functioning of the Land Bank Group whilst
conforming to all relevant legislation;
1.1.3 Prescribe a minimum set of standards which will ensure effective service
delivery, value for money, open and effective competition, ethical behaviour
and fair dealing, equity and accountability;
1.1.4 Eliminate fruitless and wasteful, and irregular expenditure; and
1.1.5 Improve Land Bank Group’s BEE scorecard in terms of the B-BBEE strategy.
2 OBJECTIVES
2.1 The objectives of this policy are to:
2.1.1 Ensure adherence of constitutional principles such as fair, equitable,
transparent, competitive and cost effective procurement processes;
2.1.2 Achieve continuous improvement on all procurement transactions;
2.1.3 Promote transformation; and
2.1.4 Achieve value for money in all procurement activities.
3 SCOPE
3.1 The Policy covers:
3.1.1 The procurement of goods, services and the appointment of service providers.
3.1.2 This policy is applicable to employees and Board members of the Land Bank
and its subsidiaries including Land Bank Insurance Company (LBIC) and Land
Bank Life Insurance Company (LBLIC), who are both regulated by the Financial
Sector Conduct Authority.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 4 of 37
3.2 Policy Exclusions
3.2.1 The following, due to the nature of the services, are excluded from this policy.
It should however be noted that while excluded from the policy these
exceptions are subject to normal governance and operational expenditure
approval processes in terms of the Delegation of Powers (DOP). The relevant
policy or applicable approval process is indicated below.
a) Income generating contracts including but not limited to Land Bank Treasury
activities (i.e. fund raising, hedging and listed debt programmes),
Intermediaries (Service Level Agreements), Brokers, Underwriting Managers
and Binder holders (Relevant Policy and Procedure documents to be
developed and approved by the appropriate Committees and/or Board where
applicable;
b) Professional memberships, subscriptions and software licenses procured on
a subscription model;
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
c) Water and electricity;
This is managed in terms of the Accounts Payable Policy and Standard
Operating Procedure Manual (SOPM)
d) Rates and taxes, other levies and other services only rendered by local
authorities or provincial national government administrations;
This is managed in terms of the Accounts Payable Policy and Standard
Operating Procedure Manual (SOPM)
e) Procurement from National, Provincial and Local Government and State
owned entities (i.e. Purchase of certain ICT hardware, software and licensing
from SITA in terms of National Treasury Practice Notes; Participation in
Transversal Terms Agreements between National Treasury and National,
Provincial and Local Government and State Owned Entities; Purchase of
established systems in line with Land Bank operations; Purchase of data sets
and information specific to Land Bank operations;
A memo must be drafted by the requesting business unit and
submitted to Procurement Committee and the CEO/MD in terms of
Section 2 of the DoP
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 5 of 37
f) The provision of degree or diploma or certificate by tertiary educational
institutions and business schools, attendance of training courses, seminars
and conferences which are required on a once-off basis, provided that such
transactions are approved by the person with the required DOP. Such quotes
must be sourced and processed by the end user department requiring the
training;
This is managed in line with the Learning and Development Policy
This does not cover generic training which will follow normal SCM
processes
g) Human resources remuneration and employee benefits such as medical
insurance or pension benefits;
This is managed in terms of the Bank’s remuneration policies,
procedures and framework
h) Procurement from Regulatory Authorities;
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
i) Parts, spares and equipment available only from Original Equipment
Manufacturers (OEMs).
This is managed in terms of the agreement between the Bank and the
OEMs or any warranties or guarantees in place
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
j) Petty cash;
This is managed in terms of the Petty Cash Policy
k) Accommodations and conferences (including venue hire, car hire and travel
bookings);
This is managed in terms of the Travel Policy and the National
Treasury guidelines
l) Educational grants;
This is managed in terms of Human Capital policies and processes
m) Appointment of auctioneers;
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 6 of 37
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
n) Letting, hiring, acquisition and alienation of land and fixed property;
This is managed in terms of the Immovable Assets Management Policy
o) Sponsorships, donations and partner marketing events such as print
advertisements; radio advertisements, TV advertisements;
This is managed in terms of Marketing policies and processes
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
Partner marketing events such as print advertisements; radio
advertisements and TV advertisements only apply to direct
advertising. The use of any agencies to advertise will follow normal
SCM processes
p) Sensitive and confidential transactions;
This can be handled as an RFQ process regardless of value depending
on the level of sensitivity and confidentiality involved
A memo must be drafted by the requesting business unit and
submitted to the Procurement Committee and/or the CFO and/or the
CEO/MD depending on the level of sensitivity and confidentiality
involved.
q) Leasing of property;
This is managed in terms of Properties and Facilities policies and
processes
r) Enterprise and Supplier Development;
This is managed in terms of the B-BBEE policy, B-BBEE Act,
Regulations and Codes of Good Practice
s) Telephone costs to Telkom; and
This will be managed as a sole source
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 7 of 37
A memo must be drafted by the requesting business unit that will
need to be signed in terms of Section 2 of the DoP
t) Specific services requested by Board and Board sub-committees (i.e. Legal,
Recruitment and Technical Training Services).
Board and/or Board sub-committees will submit the request,
technical requirements and/or scope of work to the SCM Manager
The normal supply chain processes and approval will follow
depending on the value of the transaction
The current panels for these services will be utilised if the service
providers have the requisite skill
Should the existing panels not have the requisite skill based on a
recommendation from the Board or Board Committees, other
accredited services providers or services providers nominated by the
Board or Board Committees will be invited to participate
Board members will not be invited to attend the evaluation committee
and presentations and/or to make representations for input and
guidance into the recommendation with the exception of the
appointment of the Bank’s external auditors and any executive
appointment.
A minimum turnaround time will be agreed with Board or Board
Committee members
3.3 The authority of the MD is restricted to Procurement decisions pertaining to
the Land Bank subsidiaries {Land Bank Insurance (Soc) Ltd Company (LBIC)
and Land Bank Life Insurance Company (Soc) Ltd (LBLIC)}.
3.4 Authority of the CEO is restricted to Procurement decisions pertaining to the
Land Bank.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 8 of 37
4 DEFINITIONS
B-BBEE Broad Based Black Economic Empowerment.
Black People A generic term which means African, Coloureds and
Indians who are citizens of the Republic of South
Africa by birth or descent, or who became citizens
of the RSA by naturalization before 27 April 1994
and who would have been entitled to acquire
citizenship by naturalization prior to that date
Bid A written offer in a prescribed or stipulated form in
response to an invitation by/from the company for
the provision of goods and services, through formal
written price quotations, advertised competitive
bidding processes or proposals.
BU Business Unit
CEO Chief Executive Officer
CFO Chief Financial Officer
Closed Bid A competitive bidding process, limited only to a list
of qualified pre-selected individuals/companies.
Contract A formal written agreement, which results from the
acceptance of a bid.
DoP Delegation of Powers
EME Under BBBEE Legislation, companies are classified as
Exempted Micro Enterprises or EMEs according to
their annual turnover. EMEs are the smallest entities,
with an annual turnover of R10 million or less. By
default, all EMEs receive a level 4 BBBEE status upon
declaring their turnover.
Evaluation Committee The committee is responsible for evaluating all bids
received; reducing the number of tenders to a
shortlist and making a recommendation to the
Procurement Committee.
EXCO The Executive Committee of the Land Bank Group
inclusive of employees acting in such capacity.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 9 of 37
Irregular Expenditure Expenditure other than unauthorized expenditure
incurred in contravention of/or that is not in
accordance with a requirement of any applicable
legislation, including the PFMA.
Land Bank The Land and Agricultural Development Bank of
South Africa, established in terms of the Land and
Agricultural Development Bank Act, 2002.
Land Bank Group Land Bank and its subsidiaries including Land Bank
Insurance (Soc) Ltd Company (LBIC) and Land Bank
Life Insurance Company (Soc) Ltd (LBLIC).
MD Managing Director of Subsidiary companies
Open bid A competitive bidding process, which provides for
appropriate levels of competition by advertising in
the print media and government tender bulletin.
SCM Department Includes the Procurement Officers/Specialist and
the SCM Manager.
SCM Specialist An employee of Land Bank Group whose
responsibility is to source goods and services or to
manage supplier contracts on behalf of the Land
Bank Group.
PEP Politically Exposed Persons
PPPFA Preferential Procurement Policy Framework Act
Procurement Committee A Committee mandated by the CEO/MD to take full
responsibility for all decisions falling within its
mandate.
QSEs Under BBBEE legislation, companies are classified as
Qualifying Small Enterprises or QSEs according to
their annual turnover. QSEs are those with an annual
turnover of between R10 million and R50 million.
QSEs that are able to show 51% or higher black
ownership are classed as Level 2 BBBEE contributors,
lower than 51% need to prove compliance with the
five BBBEE categories (Ownership, management
control, skills development, enterprise and supplier
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 10 of 37
development and socio–economic development for
their level to be calculated.
Single Source A form of bidding where a pre selection analysis
identifies only one amongst a few prospective
service providers to be requested to submit a final
proposal.
SCM Supply Chain Management
Unauthorized Expenditure Expenditure incurred in excess of the approved
amount and usage of allocated funds for purposes
other than originally intended.
5 CONTEXTUAL BACKGROUND
5.1 This policy is intended to facilitate the general rules, regulations and understanding
of SCM practices together with the changes to SCM practices as per relevant
legislation and regulation including but not limited to the National Treasury
Regulations, B-BBEE Act, PPPFA and other related legislation.
5.2 This policy must be seen as a tool to guide and assist in the seamless
implementation of SCM practices within the Land Bank Group.
5.3 The Supply Chain Management Policy and Procedure Manual also strive to ensure
that the Land Bank Group procures from corporate and professional entities owned
by blacks (as defined by the B-BBEE Act of 2003) and small and medium enterprises
(SMEs).
5.4 Ensure that the Land Bank Group obtains value for money in the procurement of
goods and services whilst contributing to government’s target in redressing the
economic imbalances that have been caused by unfair discrimination in the past.
5.5 The Land Bank Group subscribes to practices, legislation and regulations that
prohibits amongst others anti-competitive practices including collusive bidding,
money laundering, fraud and corruption, and ensures, through its SCM procedures
and bid requirements, that all bidders commit to avoid any and all anti-competitive
practices.
5.6 Furthermore, the Land Bank Group has a zero tolerance to any collusive practices
by not only requiring bidders to declare whether they have recently been found
guilty of such practices but also in collaboration with the Land Bank Group PEP
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 11 of 37
Policy to do sanction and PEP checks and instituting blacklisting proceedings
against such bidders that are found guilty.
5.7 Applicable legislation refers to the following, amongst others, as amended from
time to time;
a) The Constitution of South Africa, 108 of 1996
b) The Land and Agricultural Development Bank Act, 2002;
c) Public Finance Management Act No1. of 1999 (“PFMA”);
d) The Preferential Procurement Policy Framework Act of 2000 (“PPPFA”);
e) Preferential Procurement Regulations;
f) National Treasury Regulation, Instruction Notes, Circulars and Guidelines;
g) Core Global Reporting Initiative (GRI) Standards;
h) Broad Based Black Economic Empowerment Act No 53 of 2003 and Codes of
Good Practice;
i) Supply Chain Management – A Guide for Accounting Officers / Authorities
(February 2004);
j) Financial Advisory and Intermediary Services (FAIS) Act of 2002; and
k) Long-Term Insurance Act of 1998; Short-Term Insurance Act of 1998;
Insurance Act of 2017 and subordinate legislation.
5.8 This policy must be read in conjunction with, amongst others, the:
a) Land Bank Group’s Materiality Framework;
b) Incident Management Policy;
c) Politically Exposed Persons Policy;
d) Enterprise Risk Management Policy;
e) Asset Management Policy;
f) B-BBEE Policy;
g) Ethics Policy;
h) Code of Ethics and Business Conduct Policy;
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 12 of 37
i) B-BBEE Strategy;
j) Delegation of Powers;
k) Conflict of Interest Policy;
l) Fraud and Corruption Policy;
m) Incident Management Policy;
n) Transaction Advisors Policy
o) Applicable legislation;
p) Learning and Development Policy and Standard Operating Procedure; and
q) SCM Standard Operating Procedure Manual.
5.9 Changes to the FAIS Act and Insurance Act and subordinate legislation as amended
from time to time may result in additional procurement requirements that have to
be complied with. It remains the responsibility of the Managing Director of the Land
Bank Insurance Companies to ensure that these requirements are complied with.
5.10 The Land Bank Group as a whole, including LBIC and LBLIC must follow group SCM
standards before submission to the Procurement Committee.
6 POLICY
6.1 The SCM Department within the Finance Division is charged with the sole
responsibility of performing all duties relating to the engagement and management
of suppliers including sourcing of goods and/or services in Land Bank Group.
6.2 No other employee within the Land Bank Group including all Land Bank Group
Regional Office shall take on the responsibility of engaging with suppliers and
procuring goods and/or services without such request being managed through the
Land Bank Group SCM Department.
6.3 Suppliers shall only be permitted to deliver goods and/or services through the issue
of a purchase order/contract/instruction issued by the SCM Department.
6.4 Expenditure incurred for goods and/or services without an official order/
contract/instruction from the SCM Department (as per 6.3 above) shall be deemed
as irregular expenditure (Refer to section 24 below) and employee(s) responsible
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 13 of 37
for the expenditure shall be held liable for their actions and appropriate steps to
be taken against the responsible individuals.
6.5 The SCM Department, Procurement Committee and all BU’s are jointly responsible
for the successful implementation of this policy and procedures.
6.6 The CEO/MD has the power to enact and enforce SCM decisions in line with the
policy and such powers are delegated to the CFO and to the Procurement
Committee in accordance with the provisions as detailed in this policy for good
governance.
6.7 Any deviations from SCM Policy must be approved in advance (prior to the sourcing
of goods and/or services and engaging with Suppliers) by the Procurement
Committee or as delegated in this policy.
6.8 All employees involved in any aspect of SCM at Land Bank Group must comply with
the Land Bank Act (in particular section 21 and section 47), the Declaration of
Interest Policy, Land Bank Group’s Code of Ethics and Business Conduct and other
applicable policies and regulatory requirements.
a) Employees are required to:
Declare any interests (direct or indirect) that may or could interfere or give
rise to potential or perceived conflict with the performance of their duties
e.g. business or private relationships or other circumstances that could
affect the exercising of objective judgement
Declare as soon as they become aware that a subject, to be discussed at
the Procurement Committee meeting, may give rise to conflict of interest
at the beginning of the proceedings of the meeting.
b) The conflicted employee shall not participate further in the discussions of that
subject, nor take part in the decision-making process
6.9 The SCM Department is the owner of the policy and any amendments to the policy
will be recommended by EXCO to the Board for approval.
6.10 SCM Principles
6.10.1 Value for money
a) Price alone is not the only reliable indicator and the best value for money
will not necessarily be obtained by accepting the lowest price that meets
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 14 of 37
mandatory requirements, nonetheless the National Treasury Regulations
and the Public Finance Management Act shall still apply to ensure
compliance.
b) Value for money means the best available outcome when all relevant cost
and benefits over the SCM cycle are considered.
c) SCM should:
i) Avoid any unnecessary cost and delays for the Land Bank Group or
suppliers;
ii) Monitor the supply arrangements and reconsider them if expected
benefits cease to be provided; and
iii) Ensure continuous improvement in the efficiency of internal
processes and systems.
6.10.2 Open and effective competition
Land Bank Group shall ensure:
a) A framework of SCM policies, practice and procedures that is transparent;
b) Openness and transparency in the SCM process;
c) That effective competition through SCM methods suited to market
circumstances is encouraged;
d) Bias and favouritisms are eliminated; and
e) Conflict of interest is declared and avoided.
6.10.3 Ethical behaviour and fair dealing
a) The Land Bank Group commits itself to a policy of fair dealing and integrity
in the functioning of its SCM activities;
b) The Land Bank Group shall conduct business with suppliers in a manner that
promotes and encourage good supplier relations within an environment that
promotes competition and compliance with regulatory requirements.
c) All employees dealing with SCM are required to:
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 15 of 37
i) Recognize and deal with conflict of interest or the potential thereof;
ii) Deal with suppliers even-handedly / impartially;
iii) Ensure not to compromise the standing of Land Bank Group through
any act of bribery;
iv) Provide assistance in the elimination of fraud and corruption; and
v) Keep confidential proprietary information and pricing unless otherwise
agreed to with the suppliers concerned.
d) The SCM Department subscribes to Land Bank Group’s Code of Ethics and
Business Conduct Policy and non-compliance herewith will be subject to
appropriate disciplinary action.
e) A high standard of ethics must be maintained by all SCM staff, and
functionaries involved in making purchasing decisions. In return, Land Bank
Group expects the same high standard of ethical conduct from suppliers
who will be required to formally subscribe to Land Bank Group’s Code of
Ethics.
f) No functionary of the SCM Department shall use his/her authority or office
for personal gain but must put Land Bank Group’s interests foremost in all
transactions.
g) Any unethical business practice and any attempt by a supplier or potential
supplier to exert undue influence on SCM decisions, which is factually
proven, must be rejected and brought to the attention of the Procurement
Committee. Such suppliers may be blacklisted and not receive future
business.
6.10.4 Equity
Equity refers to the application and observance of legislation and policies,
which are designed to advance persons, or categories of persons
disadvantaged by unfair discrimination.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 16 of 37
6.10.5 B-BBEE
Preference shall be given to B-BBEE suppliers with a level 1 to level 4
contribution factors, verified by an accredited verification agency. This is an
important component of the Group’s desire to enhance its B-BBEE objectives
and credentials.
6.11 The requesting BU is responsible for identifying the need for goods, works or
services including the scoping thereof.
6.12 It is the responsibility of the SCM Department to identify suppliers and obtain
quotations for goods, works or services for Land Bank Group.
6.13 Where required, the SCM Department will solicit the services of the requesting BU
for their technical knowledge on the requested goods, works or service.
6.14 The SCM function is centralized at Head Office and purchase orders can only be
effected by the SCM Department through the generation of a purchase requisition
from the requesting BU against appropriate approved budgets.
6.15 Procurement of goods, works and services will be done using the accredited
suppliers on Land Bank Group’s supplier database (with the exception of public
tenders).
6.16 In the event that no suitable supplier is available on the supplier database,
suppliers will be sourced externally.
6.17 Externally sourced suppliers will be required to undergo a Supplier accreditation
process prior to the procurement of any goods, works or services.
6.18 BROAD-BASED BLACK ECONOMIC EMPOWERMENT (BBBEE)
6.18.1 Land Bank Group, through its SCM activities must support entities owned by
black people in line with government policy objectives.
6.18.2 Partnerships or joint-ventures which will lead to skills or technology transfer
to black entrepreneurs with a view to the formation of separate businesses
may be supported in line with applicable legislation if the black partner/s
own at least 51% of the business.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 17 of 37
6.18.3 The SCM Manager must issue regular reports to EXCO detailing the amount
spent on commodities and services and the proportion of that amount spent
with regards to BEE.
6.18.4 The Land Bank Group may negotiate BEE commitment plans with suppliers
in instances where the BEE level of the Supplier falls below level 4. Such
commitment or development plan shall have clear timelines and will be
monitored regularly. And it shall form part of the agreement the Land Bank
Group has with the Supplier.
6.18.5 The Land Bank Group shall be entitled to terminate the relationship in
instances where the supplier is unwilling to work towards achieving a better
BEE level or adhere to the agreed upon BEE commitment plan unless strong
motivation is given why the supplier cannot improve i.e. use of some
international IT systems (e.g. SAP)
7 ANNUAL PROCUREMENT PLANS
7.1 BU’s are responsible to submit annual Procurement plans to the SCM Manager on
an annual basis.
7.2 The annual procurement plan will be reviewed by the SCM Manager, recommended
by the Procurement Committee and submitted to the Executive Committee for
approval.
7.3 The CEO shall sign the plans for the Land Bank Group before submission to National
Treasury.
7.4 Performance against the annual Procurement Plans shall be reported to the National
Treasury on a quarterly basis.
8 AVAILABILITY OF BUDGET
8.1 Procurement of goods, works and services must be done against approved
available budget.
8.2 Where no budget is available, a memorandum must be submitted by the requesting
BU to the CFO for the authorization of the expenditure. The CEO/MD should be
notified of any such expenditure.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 18 of 37
8.3 BU is responsible to ensure that sufficient budget is available when requesting for
the procurement of goods and or services.
9 PROCUREMENT OF GOODS, WORKS AND SERVICES UP TO A VALUE OF R10 000 (VAT
INCLUSIVE)
9.1 Goods, works and services up to the value of R10 000 (VAT inclusive) must be
procured, in an equitable manner, by obtaining one (1) quotation from prospective
suppliers.
9.2 The order for these goods, works and services must be generated via the
procurement system (SAP) and authorized in line with the DOP.
9.3 Under no circumstances may an order be split so that it falls under this threshold.
10 PROCUREMENT OF GOODS, WORKS AND SERVICES ABOVE THE VALUE OF R10 000 BUT
NOT EXCEEDING R500 000 (VAT INCLUSIVE)
10.1 Goods, works and services above the value of R10 000 and but not exceeding
R500 000 (VAT inclusive) must be procured by obtaining three (3) written
quotations from prospective suppliers.
10.2 The order for these goods, works and services must be generated via the
procurement system (SAP) and authorized in line with the DOP.
10.3 Under no circumstances may an order be split so that it falls under this threshold
or within another threshold.
10.4 If it is not possible to obtain three (3) written price quotations, the reasons should
be recorded and approved by the SCM Manager and CFO and reported to the
Procurement Committee.
11 PROCUREMENT OF GOODS, WORKS AND SERVICES ABOVE THE VALUE OF R500 000
(VAT INCLUSIVE)
11.1 For all goods, works and services above the value of R500 000 (VAT inclusive), an
open bid process must be followed.
11.2 Under no circumstances may an order be split to avoid the open bid process.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 19 of 37
11.3 The order for these goods, works and services must be generated via the
procurement system (SAP) and authorized in accordance with the DOP.
12 PANEL APPOINTMENTS
12.1 Land Bank Group may appoint a panel of Service Providers, to utilize on an ad hoc
basis, for a defined set of goods/services and the appointment will be done via
an open tender process.
12.2 Once a panel has been appointed and contracted, the requesting BU shall be
responsible for managing relationship of the Panel members and providing
technical specifications/scope of work, SCM will be responsible for oversight of
the panel.
12.3 Panels are segmented according to Services required by the Bank (i.e. Human
Capital, Legal, Consulting, Training, Professional and Technical Services and
Improving the utilisation in line with the B-BBEE Act, Regulations and Codes)
12.4 Each service is dealt with differently in terms of process depending on the level
of confidentiality and sensitivity required
12.5 The general process utilised for panel procurement will be as follows:
12.5.1 When services from the Panel are required the BU will send a detailed
Scope of Work to SCM who will invite all panel members for the panel
to respond with a quotation (RFQ). A BU may motivate circulating the
quote to one or a selection of members from the panel. Approaching
one panel member is relevant for specialised services. This motivation
has to be submitted in writing to the SCM Manager for approval and
the request must be approved prior to any communication with the
panel.
12.5.2 A Memo for each individual engagement, including the cost, must
approved in line with the DOP;
12.5.3 An Engagement Letter needs to be signed by SCM before any individual
engagement can commence.
12.6 The exception to 12.5 above will be applicable to panels that require a level of
sensitivity and confidentiality (i.e. Human Capital Panels that involve
remuneration; Legal Services Panels; Internal Audit and Forensic Panels). These
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 20 of 37
panels will be managed in terms of policies and processes of the specific business
unit. The EM of the specific BU and the CFO will have oversight of these panels
12.7 The Transaction Advisory Panel will be managed in conjunction with the
Transaction Advisory Policy; Revenue Generating and Unsolicited Bids policies and
processes.
12.8 Any new requests for panels to be created will need to be submitted in writing to
the SCM Manager for Procurement Committee approval.
12.9 The SCM Standard Operating Procedure Manual details the process for the
management of different panels within the Land Bank Group.
13 SINGLE SOURCING
13.1 This provision is intended for cases of exceptional circumstances prevailing at
that time where immediate action is necessary or if the goods and/or services are
produced or available from sole service providers.
13.2 It is therefore recognized that there will be instances when it would be impractical
to invite open bids / follow the standard procurement process.
13.3 A request for single source must be approved prior to the appointment of a
service provider to deliver goods/services.
13.4 The reasons for such action must be recorded and approved as follows:
a) Amounts up to and including one hundred thousand rand (<R100 000)
excluding VAT shall be approved by the CFO;
b) Amounts above one hundred thousand Rand (>R100 000) up to and
including five hundred thousand Rand (<R500 000) excluding VAT shall be
recommended by the CFO and approved by the Procurement Committee; and
c) Amount greater than five hundred thousand Rand (>R500 000) excluding
VAT shall be approved by the CEO/MD on recommendation from the CFO
and Procurement Committee.
13.5 Poor planning shall not be acceptable as justification for the use of limited
bidding.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 21 of 37
14 BIDS
14.1 An open bid is recognized as the preferred method of procurement.
14.2 Closed bids are limited only to a list of individuals / companies that are selected
from pre-selected suppliers either from:
14.2.1 An approved in-house database or sourced from credible rating
agency; or industry regulatory affiliate institutions; and/or
14.2.2 Source directly from suppliers/companies that render/offer
specialized services/goods or circumstances (i.e. limited suppliers due
to right, value, time, risk involved, amongst others).
14.3 The reasons for following a closed bid should be clearly articulated in the tender
report and approved as a deviation from process
14.4 All bids above R500 000 (vat inclusive) shall be advertised on the National
Treasury e-Tender Portal and in other appropriate media if required.
14.5 Bids will need to be advertised for a minimum of seven (7) calendar days.
14.6 The requesting BU Manager must draft a memorandum for the expenditure and
the bid, which must be approved and authorized in line with the DOP.
14.7 Bids must be submitted using the format prescribed by Land Bank Group.
14.8 All bids must be submitted together with all required and requested compliance
documentation.
14.9 All bids must be hand delivered to Land Bank Group’s registered office and placed
in the bid box.
14.10 Bids or offers received after the closing date and time will not be considered for
evaluation and the subsequent awarding of orders or contracts.
14.11 Bids will not be re-issued after the closing date if there is at least one acceptable
offer.
14.12 If the scope of work changes significantly, a new bid must be issued.
14.13 Bids shall not be re-issued with the sole purpose of changing the outcome that
would have arisen from the original bids.
14.14 Where a supplier did not meet the standard terms and conditions of the bid
document, the supplier will be disqualified. The reasons for the disqualification
must be clearly articulated in the tender report.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 22 of 37
14.15 The bid box must be opened in the presence of a designated employee from the
SCM Department and Internal Audit or Risk/Compliance for the specified bid on
the closing date of the bid.
14.16 In the presence of a designated employee from Internal Audit or Risk/Compliance,
the SCM Department designate must complete a bid register listing the company
names of all bids received.
14.17 All bids will be assessed by the SCM Department for compliance in respect of
completeness of the bid documents and the submission of supporting documents
as set out in the terms of reference document.
14.18 The awarding of a bid does not constitute a binding contract with Land Bank
Group and is subject to the signing of a Service Level Agreement between the
Service Provider and the Land Bank Group.
15 BID EVALUATION COMMITTEE
15.1 The Bid Evaluation Committee shall constitute a minimum of three (3) members
responsible for evaluating the submissions that must individually and collectively
have sufficient knowledge and expertise to fulfil their duties. In the event that the
procurement expense is expected to exceed R5million, a minimum of five (5)
members should be appointed. The Committee must consist of representatives
from:
15.1.1 Independent Head Office BU/Department;
15.1.2 The SCM Department (who will attend the meeting in an administrative
capacity and not as a voting member),
15.1.3 Internal Audit and/or Compliance (who will attend the meeting in its capacity
as an observer), and
15.1.4 The requesting BU.
15.2 The SCM Department is responsible for induction training to be provided to the
Bid Evaluation Committee members.
15.3 The SCM Department should circulate the relevant documentation consisting of
at least the Bid, the relevant proposals and the evaluation sheet to members of
the Bid Evaluation Committee at least three (3) business days before the
Committee meeting.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 23 of 37
15.4 The Committee must shortlist bidders and evaluate proposals in a closed session
prior to forwarding the evaluation report together with a recommendation to the
Procurement Committee for adjudication.
16 SCORING OF BIDS
16.1 Planning and stipulation of preference point system to be utilized.
The Bank shall, prior to making an invitation for bids:
a)
b) Properly plan for, and as far as possible, accurately estimate the costs of the
provision of goods, works or services for which an invitation for bids is to
be made;
c) Determine and stipulate the appropriate preference point system to be
utilized in the evaluation and adjudication of the bidders; and
d) Determine whether the goods, works or services for which an invitation for
bids is to be made, has been designated for local production and content in
terms of the PPPFA.
16.2 Evaluation of tenders on Functionality.
16.2.1 Land Bank Group shall indicate in the invitation to submit a bid whether that
bid will be evaluated on functionality.
16.2.2 The evaluation criteria for measuring functionality must be objective.
16.2.3 When evaluating a bid on functionality, the following must be clearly
specified in the invitation to submit a bid:
a) Evaluation criteria for measuring functionality;
b) Weight of each criterion;
c) Applicable values; and
d) Minimum qualifying score for functionality.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 24 of 37
16.2.4 No bids must be regarded as acceptable if it fails to achieve the minimum
qualifying score for functionality as indicated in the bid invitation.
16.2.5 Bids that have achieved the minimum qualification score for functionality
must be evaluated further in terms of the preference point systems
prescribed in 16.3 and 16.4.
16.2.6 Bids may be disregarded in the following instances:
a) when the financial performance and results of a service provider is
deemed by the Procurement Committee as insufficient;
b) the associated reputational risk is viewed as excessive by the
Procurement Committee.
16.3 The 80/20 preference point system for acquisition of services, works or goods up
to a Rand value of R50 million
16.3.1 The following formula must be used to calculate the points out of 80 for
price in respect of a tender with a Rand value equal to or above R30 000 and
up to Rand value of R50 million, inclusive of all applicable taxes:
Pt - P min
P minPs = 80 1 -
Where
Ps = Points scored for price of bid under consideration
Pt = Price of bid under consideration
P min =Price of the lowest acceptable bid
16.3.2 The following table must be used to calculate the score out of 20 for BBBEE:
B-BBEE Status Level of Contributor Number of Points
1 20
2 18
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 25 of 37
B-BBEE Status Level of Contributor Number of Points
3 14
4 12
5 8
6 6
7 4
8 2
Non-compliant contributor 0
a) A tenderer must submit proof of its B-BBEE status level of contributor.
b) A tenderer failing to submit proof of B-BBEE status level of contributor or is a non-
compliant contributor to B-BBEE may not be disqualified, but-
i) may only score points out of 80 for price; and
ii) scores 0 points out of 20 for B-BBEE.
c) A tenderer may not be awarded points for B-BBEE status level of contributor if the
tender documents indicate that the tenderer intends subcontracting more than 25%
of the value of the contract to any other person not qualifying for at least the points
that the tenderer qualifies for, unless the intended subcontractor is an EME that has
the capability to execute the subcontract.
d) The points scored by a tenderer for B-BBEE in terms of sub regulation (2) must be
added to the points scored for price under sub regulation (1) (PPPFA).
e) The points scored must be rounded off to the nearest two decimal places.
f) Subject to sub-regulation 9 and regulation 11 (PPPFA), the contract must be awarded
to the tenderer scoring the highest points.
g) If the price offered by a tenderer scoring the highest points is not market related,
the organ of state may not award the contract to that tenderer.
The organs of state may-
(i) negotiate a market-related price with the tenderer scoring the highest points or
cancel the tender;
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 26 of 37
(ii) if the tenderer does not agree to a market-related price, negotiate a market-
related price with the tenderer scoring the second highest points or cancel the
tender;
(iii) if the tenderer scoring the second highest points does not agree to a market-
related price, negotiate a market-related price with the tenderer scoring the
third highest points or cancel the tender.
h) If a market-related price is not agreed as envisaged in paragraph (b)(iii), the organ
of state must cancel the tender.
16.4 The 90/10 preference point system for acquisition of services, works or goods
with a Rand value above R50 million
16.4.1 The following formula shall be used to calculate the points out of 90 for price
in respect of bids where the Rand value is above R50 000 000 (VAT inclusive):
Pt - P min
P minPs = 90 1 -
Where
Ps = Points scored for price of bid under consideration
Pt = Price of bid under consideration
P min =Price of the lowest acceptable bid
16.4.2 The following table must be used to calculate the score out of 10 for BBBEE:
B-BBEE Status Level of Contributor Number of Points
1 10
2 9
3 6
4 5
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 27 of 37
B-BBEE Status Level of Contributor Number of Points
5 4
6 3
7 2
8 1
Non-compliant contributor 0
a) A tenderer must submit proof of its B-BBEE status level of contributor.
b) A tenderer failing to submit proof of B-BBEE status level of contributor or is a
non-compliant contributor to B-BBEE may not be disqualified, but-
(i) may only score points out of 90 for price; and
(ii) scores 0 points out of 10 for B-BBEE.
c) A tenderer may not be awarded points for B-BBEE status level of contributor if
the tender documents indicate that the tenderer intends subcontracting more
than 25% of the value of the contract to any other person not qualifying for at
least the points that the tenderer qualifies for, unless the intended subcontractor
is an EME that has the capability to execute the subcontract.
d) The points scored by a tenderer for B-BBEE in terms of sub regulation (2) must
be added to the points scored for price under sub regulation (1) (PPPFA).
e) The points scored must be rounded off to the nearest two decimal places.
f) Subject to sub-regulation 9 and regulation 11 (PPPFA), the contract must be
awarded to the tenderer scoring the highest points.
g) If the price offered by a tenderer scoring the highest points is not market related,
the organ of state may not award the contract to that tenderer.
The organs of state may-
(i) negotiate a market-related price with the tenderer scoring the highest
points or cancel the tender;
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 28 of 37
(ii) if the tenderer does not agree to a market-related price, negotiate a
market-related price with the tenderer scoring the second highest points
or cancel the tender;
(iii) if the tenderer scoring the second highest points does not agree to a
market-related price, negotiate a market-related price with the tenderer
scoring the third highest points or cancel the tender.
h) If a market-related price is not agreed as envisaged in paragraph (b)(iii), the
organ of state must cancel the tender.
16.5 Award of contracts to bids not scoring the highest number of points.
a) A contract may be awarded to a tenderer that did not score the highest points
only in accordance with section 2(1)(f) of the PPPFA, provided that the reasons
for such a decision are documented and supported by the Procurement
Committee.
b) If an organ of state intends to apply objective criteria in terms of section 2(1)(f)
of the PPPFA, the organ of state must stipulate the objective criteria in the tender
documents.
16.6 Cancellation and re-invitation of bids
16.6.1 80/20 preference point system
(a) In the event that, in the application of the 80/20 preference point system
as stipulated in the bid documents, all bids received exceed the estimated
Rand value of R50 000 000, the bid must be cancelled.
(b) If one or more of the acceptable bids received are within the prescribed
threshold of R50 000 000, all bids received must be evaluated on the 80/20
preference point system.
16.6.2 90/10 preference point system
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 29 of 37
(a) In the event that, in the application of the 90/10 preference point system as
stipulated in the bid documents, all bids received are equal to, or below
R50 000 000, the bid must be cancelled.
(b) If one or more of the acceptable bids received are above the prescribed
threshold of R50 000 000, all bids received must be evaluated on the 90/10
preference point system.
16.6.3 In the event that Land Bank Group cancels a bid invitation as contemplated in
sub-regulations (1)(a) and (2)(a) of regulation (8) of PPPFA, Land Bank Group
shall re-invite tenders and shall, in the tender documents, stipulate the correct
preference point system to be applied.
16.7 In addition, Land Bank Group may before the award of a tender, cancel the tender
invitation if:
a) Due to changed circumstances, there is no longer a need for the goods or
services specified in the invitation;
b) Funds are no longer available to cover the total envisaged expenditure;
c) No acceptable tender is received; or
d) There is a material irregularity in the tender process.
16.8 The Land Bank Group will publish the decision to cancel the tender invitation in
the same manner in which the original tender invitation was advertised;
16.9 Land Bank Group will at all times adhere to the relevant treasury instructions and
shall only with the prior approval of the relevant treasury, cancel a tender
invitation for the second time.
17 UNSOLICITED BIDS
17.1 Land Bank Group shall reject unsolicited bids during a tender process and shall
not be in a position to accept such bids as this will eliminate a competitive
process.
17.2 The SCM Department shall not entertain such requests or presentation
introductions as this will give the impression of giving a supplier an uncompetitive
advantage.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 30 of 37
17.3 Land Bank Group will review unsolicited bids for new business opportunities that
do not relate to any existing tenders in line with National Treasury Regulations.
17.4 Should such unsolicited bids provide a potential business opportunity, a proposal
will be drafted to the relevant Committees in terms of Land Bank’s governance
processes and in line with regulations.
a) Credit related procurement requests will be referred to the relevant Credit
Committee and managed in terms of relevant policies and processes
b) SCM related transactions will be presented to Project Portfolio Committee
and/or Procurement Committee for consideration.
18 SUPPLIER DATABASE
18.1 The SCM Department is responsible for the maintenance of the supplier database
and managing the process surrounding the accuracy of information contained in
the database to ensure efficiency.
18.2 The supplier database should be utilized when requisitioning request for quotes.
18.3 If no suitable supplier can be found on the database, supplier may be sourced
externally by following the normal procurement rules and processes.
18.4 New suppliers will have to complete a Supplier Accreditation Form and meet Land
Bank Group’s requirements prior to being included in Land Bank Group’s database
and any business being done with them.
18.5 The SCM Department must ensure that suppliers are tax compliant prior to
appointment and conducting any business with them.
18.6 The service delivery and compliance of all suppliers on the database will be
monitored on a regular basis.
18.7 No new suppliers shall be added to the database without approval of the SCM
Manager.
18.8 All new suppliers / service providers will be subjected to background checks (i.e.
Politically Exposed Persons, Media Checks, and Business Partner checks). The
background checks will be a review on existing suppliers /service providers in
terms of the requirements in the PEP policy.
18.9 Procurement Specialist should compile a preferential scorecard of prospective
suppliers to be used. The list should also be used effectively to promote Black
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 31 of 37
Economic Empowerment through the participation of black owned enterprises;
black-women owned enterprises, Exempt Micro Enterprises, Qualifying Small
Enterprises and designated sectors (as defined in the B-BBEE Act and Codes of
Good Practice)
18.10 The SCM Manager should apply the prescripts of the PPPFA and its associated
Regulations for all procurement with a value equal or above R 30 000 (VAT
included).
19 SUPPLIER RESTRICTION
19.1 The SCM Manager may recommend, under below circumstances, a motivation to
the Procurement Committee, for approval to limit a supplier from current and
future business with the Land Bank Group for a determined term.
19.2 The below list is non exhaustive and suppliers can be restricted for other reasons
which the SCM Manager, with the support of EXCO, deems necessary:
a) Before suppliers are used it should be confirmed on the National Treasury
database for restricted bidders. If the supplier is listed on the National Treasury
databases such suppliers shall be restricted after following the necessary
allowed appeal process;
b) Proven non-performance / non-Compliance with contractual obligations when
stipulated as a condition;
c) Proven unethical actions and behaviour and/or the abuse of the procurement
system.
20 PROCUREMENT COMMITTEE
20.1 The CEO/MD shall appoint a standing Procurement Committee and the
Committees mandate, roles and responsibilities shall be detailed in the
Committees Charter.
20.2 Procurement Committee discussions will remain confidential and all Members
shall sign a non-disclosure agreement.
20.3 Procurement Committee governance is regulated through the Procurement
Committee Charter
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 32 of 37
20.4 The Procurement Committee is mandated by the Land Bank CEO/MD to take full
responsibility for all recommendations and approvals falling within the
Committees mandate, in terms of the Charter and DOP.
20.5 It is the responsibility of the Procurement Manager that all spend falling within
the Procurement Committee’s mandate be submitted to the Committee with all
relevant documents and recommendations.
20.6 The Procurement Committee must consider the recommendations/reports of the
Bid Evaluation Committee and must approve a preferred supplier based on
discussions and their evaluation.
20.7 The Procurement Committee must ensure that:
a) A member of the Bid Evaluation Committee or an adviser or person assisting
the Bid Evaluation committee may not be a voting member of the Procurement
Committee for the specific bid that is being adjudicated;
b) All necessary bid documentation has been received;
c) Disqualifications are justified and that valid and accountable
reasons/motivations were furnished for the rejection of bids;
d) All recommendations/reports regarding the amendment variation, contract
extension, cancellation or transfer of contracts awarded are considered;
e) Scoring of bids has been fair, consistent and correctly calculated and applied;
and
f) Bidder’s declarations of interest have been taken cognizance of.
20.8 The Procurement Committee may at their discretion request bidders to prepare
a supplementary presentation and stipulate the format and content of the
presentation.
20.9 The presentation will be used only as a platform to acquire additional
information on goods, works or services being offered.
20.10 Procurement Committee members may not engage or communicate with
potential Service Providers during the period of the bid process, all
communications are to be facilitated via the SCM Department.
20.11 In addition, the Committee shall be responsible to approve deviation to the
Procurement Process prior to the appointment of a service provider to render
goods/services.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 33 of 37
21 TENDER REPORT
21.1 A tender report should be compiled to motivate every open tender decision and
should as a minimum include the following:
21.1.1 Details;
21.1.2 Background;
21.1.3 Description of Services;
21.1.4 Scope of Services;
21.1.5 Sourcing Method;
21.1.6 Bids received; and
21.1.7 Shortlisting Process:
a) First phase of the evaluation process:
(i) Technical Criteria
(ii) Comments from the Bid Evaluation Committee
b) Second phase of the evaluation process
(i) BEE
(ii) Pricing
c) BEE points
d) Price points
e) Recommendation
22 CONTRACTS
22.1 The SCM Department is responsible for the maintenance of all contracts and
managing the processes surrounding their renewals.
22.2 All contracts shall be facilitated in terms of the Contract Management Procedure.
22.3 No work may commence before a Service Level Agreement is entered into
between the Group and the Service Provider.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 34 of 37
22.4 Supplier performance management shall be used to measure, analyse and
manage the performance of suppliers in an effort to reduce cost, mitigate risk
and drive continuous improvement.
22.5 The SCM Department shall keep, maintain and manage a comprehensive list of
all active term contracts for goods and services sourced by Land Bank Group.
22.6 Contracts for goods/services shall be renewed every three (3) years by going out
on bid where necessary, in order to test the market or source new service/goods
providers/suppliers. The renewal or testing of the market shall be initiated in
advance before the expiry of the contract.
22.7 The SCM Manager and the affected Department shall assess whether an
extension of the contract duration should be initiated or not, by weighing up
benefits and risks that could result from the extension, which shall be motivated
to the Procurement Committee for recommendation in line with their mandate.
Contract extensions shall be limited to 20% of the original contract value for
construction contracts and 15% of the original contract value for all other
contracts, if there is sufficient reason to extend.
22.8 The extension of contracts should not be used to avoid an open tender process.
There must be valid grounds why this method should be used which must be
presented to the Procurement Committee for approval.
22.9 Notwithstanding 13.5 above, Land Bank Group may contract for a period longer
than a three (3) year contract cycle to a period that is suitable and/or efficient
for economical and/or strategic reasons that are beneficial to Land Bank Group.
22.10 The SCM Department shall negotiate contract for goods/services, in conjunction
with the requesting BU.
22.11 The SCM Department shall be responsible to inform the contractor /service
provider of the extended period if approved and the amendment of the
agreement shall be reviewed and effected by the Legal Department before being
signed.
22.12 The supplier will only commence service delivery once a contract is approved
and signed, unless there are circumstances, which dictate otherwise that is in
the best interest of Land Bank Group.
22.13 Where an exceptional circumstance arises, an engagement letter containing at
least the minimum deliverables, approved pricing; and terms and conditions,
which has been signed by the SCM Manager/Chief Financial Officer shall be
issued to the supplier to accommodate the signing of the contract.
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 35 of 37
22.14 The SCM Department in consultation with the BU will agree on a supplier
performance scorecard, to be included in the contract.
22.15 The Legal Department will validate the Service Level Agreement, which will be
communicated, agreed to and signed by the Land Bank Group and the supplier.
22.16 The requesting BU shall be responsible for the management and monitoring of
services in terms of the supplier performance scorecard and these reports shall
accompany request for payments in line with the contract.
22.17 All contracts must be administered in line with the Contracts Management
Process.
22.18 It is the responsibility of the requesting BU to engage with SCM Department for
a new contract or to make arrangement for a new bid.
23 SUBCONTRACTING
23.1 The Land Bank Group will make provision for two types of subcontracting:
a. Subcontracting as condition of tender; or
b. Subcontracting after during the awarding process.
23.2 Bidders must submit documentation in terms of Treasury Regulations as part of
their bid submission, stipulating if they will subcontract any portion of the
services being rendered.
23.2.1 Subcontracting as conditions of tender:
a) For contracts above R30 million, Land Bank Group shall apply
subcontracting in order to advance designated groups;
b) This will be implemented by advertising the tender with specific
tendering conditions that the successful tenderer must subcontract a
minimum of 30% of the value of the contract to
i) An EME or QSE;
ii) An EME or QSE which is at least 51% black owned;
iii) EME or QSE at least black youth;
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 36 of 37
iv) EME / QSE – ate least 51% black women;
v) EME / QSE – 51% disabilities;
vi) EME / QSE – 51% rural;
vii) A cooperative which is at least 51% black owned;
viii) EME/QSE – 51% black veterans.
23.2.2 Subcontracting during the award of tender:
a) The bidder that was awarded the contract may only enter in
subcontracting arrangement with approval of the Land Bank Group.
b) The Land Bank Group will subcontract to promote the designated
sectors. The Land Bank Group will not subcontract in such manner
that the local production and content of the overall value of contract
is reduced below minimum threshold.
c) Land Bank Group will not allow subcontracting if such subcontracting
results in more than 25% to enterprises that does not have equal or
higher BBBEE level.
24 CONFLICT OF INTEREST
24.1 All employees involved in any aspect of SCM, shall make full disclosure of any
conflict of interest in writing with regards to the procurement of goods, works and
/ or services.
24.2 Land Bank Group employees shall declare their business and shareholding interest
in terms of the Declaration of Interest Policy. The SCM department will engage with
the Human Capital department on such declarations.
24.3 Employees who have, or may be perceived to have, a vested interest in the outcome
of a purchase of goods, works and/or services should disclose any conflict of
interest to their line manager and should be excluded from any involvement in that
particular transaction.
24.4 If a SCM Official or any other member of an adjudication authority (e.g. the
Evaluation Committee and/or the Procurement Committee) or their family members
have an interest in any potential supplier to whom an enquiry is to be issued or a
contract has been awarded, he/she must divulge such interest in writing to the SCM
LAND AND AGRICULTURAL DEVELOPMENT BANK OF SOUTH AFRICA
Supply Chain Management Policy_v10 28 January 2019 Page 37 of 37
Manager/Procurement Committee Chairperson and recuse himself/herself from
the process.
24.5 Members of the Procurement Committee must have their interest noted and
recorded at every meeting of the Committee and should recuse themselves from
the meeting while such matter in which they have an interest, is being discussed.
25 Non-compliance with the policy will result in irregular expenditure
26 PROCESS
The process for SCM is detailed in the Standard Operating Procedure Manual for SCM.
27 APPROVAL
The policy was approved by Board and it is effective from 28 January 2020 and will be
reviewed 28 January 2021.